Bwin Shares Rise With Move Into Italy
VIENNA, Sept 7 (Reuters) - Austrian Internet betting and gambling operator bwin's plans to raise its market share in the Italian online poker market with an acquisition was cheered by analysts and drove its stock higher on Monday.
Bwin said in a statement that it is in the final stages of talks to buy all of Italy's Gioco Digitale, one of the biggest online poker operators in the country, ahead of expected further deregulation of the Italian online gambling market.
The company declined to disclose terms under discussion. Daniel Stewart & Company analyst James Hollins said he estimated the purchase price to be around 100 million euros ($143 million), and expected the deal to boost bwin's earnings.
'It would be a very good deal,' Hollins said. 'Even without cost and revenue synergies we would expect it to be earnings enhancing by more than 10 percent.'
Shares in bwin rose as much as 7 percent to 29.10 euros, the highest level since late July. The share has more than doubled since the end of last year, partly on hopes for the fragmented online sector to consolidate.
'There is still lots of consolidation coming in this industry and this is only the start of a number of deals,' Hollins said. 'It certainly wouldn't stop (bwin) from doing other deals, I would have thought.'
Bwin had said in its quarterly report last month that it plans to expand its Italian poker, casino and sports betting operations. It said on Monday it had an agreement in principle to buy 100 percent of Gioco from its current shareholders.
Britain's PartyGaming last month agreed to buy all of the assets of WPT Enterprises Inc, including the World Poker Tour brand, for $12.3 million in cash.
888 has said it is close to making an acquisition, but did not disclose what the target was.
Bwin said last month that due to a recently passed law to be enacted this autumn, cash poker games and other games of chance will be permitted in Italy in addition to sports betting and online poker tournaments, raising the profile of the market.
Gioco is currently the biggest online poker brand in Italy with a market share of around 20 percent, while bwin has around 6 to 7 percent, analysts said.
